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2013 | OriginalPaper | Chapter

1. The GTAP-E: Model Description and Improvements

Authors : Alessandro Antimiani, Valeria Costantini, Chiara Martini, Alessandro Palma, Maria Cristina Tommasino

Published in: The Dynamics of Environmental and Economic Systems

Publisher: Springer Netherlands

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Abstract

A modified version of the GTAP-E model is developed in order to assess the effects of alternative climate change policies on economic and carbon emissions. We propose regional disaggregation which allows the role of major countries in economic as well as emission responses to be better defined. Sector disaggregation is closely related to international energy balances in order to calibrate the model on more realistic emission levels. An ad hoc emission intensity calibration is also implemented for better representation of sector-based emission levels. A specific analysis on substitution elasticities in the energy nests completes the proposed adjustments to the original GTAP-E model.

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next chapter Carbon Leakage and Trade Adjustment Policies
Footnotes
1
Global Trade Analysis Project (GTAP), developed by the Center for Global Trade Analysis in Purdue University’s Department of Agricultural Economics, West Lafaiette, Indiana, USA. For more information, see also https://​www.​gtap.​agecon.​purdue.​edu/​.
 
2
The new GTAP 8 version will be available in 2012 and will allow 2004 and 2007 data to be compared.
 
3
CPC was developed by the Statistical Office of the United Nations to serve as a bridge between the ISIC and other sectoral classification.
 
4
Hertel and Tsigas (1997) offers a detailed explanation of the theory behind the model, especially with regard to the derivation of the behavioural equations.
 
5
The real carbon tax rate is defined as the nominal tax rate deflated by the income disposition price index.
 
6
Following McDougall and Golub (2007) and Ludena (2007), we converted emission data from Gg of CO2, as expressed in Lee (2008), into million tons of carbon.
 
7
For a comprehensive discussion on substitution elasticities in the energy sector, see Koetse et al. (2008) and Okagawa and Ban (2008), while Panagarya et al. (2001) and Welsch (2008) discuss the role of import demand elasticities in international trade.
 
8
The gas sector in the present aggregation includes the natural gas extraction and gas manufacture and distribution sector.
 
9
In order to treat regional GDP as an exogenous variable and to shock it, regional technological progress was taken as an endogenous variable.
 
10
Emissions were swapped with technical progress using a specific closure (Altertax) that allows some data to be changed but preserves the overall consistency of the model.
 
11
Robustness checks for model results to different parameters were addressed by a sensitivity analysis in which standard deviation from results in our version is rather small. More importantly, we also found that by relying on original GTAP 7.1 substitution elasticities, carbon leakage would result in overestimated values, especially due to substitution elasticity between capital and energy in the first nest under the production function.
 
12
In order to make emission levels in GTAP-E model as consistent as possible with those considered for the Kyoto targets by official IPCC documents, we first calculated the deviation between GTAP-E and IPCC emission data in 2004 and then proportionally changed the 1990 IPCC emission data in order to obtain the effective abatement efforts required by the achievement of the Kyoto Protocol targets.
 
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Metadata
Title
The GTAP-E: Model Description and Improvements
Authors
Alessandro Antimiani
Valeria Costantini
Chiara Martini
Alessandro Palma
Maria Cristina Tommasino
Copyright Year
2013
Publisher
Springer Netherlands
Book
The Dynamics of Environmental and Economic Systems

Print ISBN: 978-94-007-5088-3

Electronic ISBN: 978-94-007-5089-0

Copyright Year: 2013

DOI
https://doi.org/10.1007/978-94-007-5089-0_1